The Federal Reserve Bank of Atlanta defines housing affordability as a family earning a median income being able to pay for a median-priced home without spending more than 30% of their budget, based on guidelines from the U.S. Department of Housing and Urban Development.
The Atlanta Fed tracks housing affordability using the HOAM (Home Ownership Affordability Monitor) Index, which measures the ability of a median-income household to absorb the estimated annual costs associated with owning a median-priced home.
The latest numbers show that housing affordability may be improving as demand drops, leading to falling home prices.
Dominic Purviance, a residential housing expert with the Atlanta Federal Reserve, shared about what first-time home buyers should keep in mind right now.
“So, [while] there are a lot of things to consider, [the] most important is your personal financial situation and how long you’re going to be staying in the house because even if you see prices soften a little bit this year, long-term hopefully we’ll see some improvement and it should balance itself out,” said Purviance.
